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As per law of diminishing returns, marginal production of a factor of production starts declining with increase in factor of production. In other words, in a production system comprising of fixed and variable inputs, each extra unit of variable input will result in lower increase in output or lower productivity. Let us take the case of a factory where fixed inputs such as machines and ...

Solution Summary

1- what is the law of diminishing returns? Give discriptive example?

3- distinguish between explicit & implicit costs, giving example of each.
What are the explicit & implicit costs of attending college?? Why does the economist classify normal profit as a cost??